Major record labels, including Arista Records, Warner Bros. Records, Capitol
Records and UMG Recordings have
launched a lawsuit against AllofMP3.com claiming that the Web site has been
selling music in violation of copyright. The labels claim in the lawsuit that
Russia-based Mediaservices, parent company of AllofMP3.com, profits off
copyrighted music without paying any royalties to the holders. Instead of paying
royalties to the record labels, Mediaservices shares a cut of its revenue with a
Russian licensing group, which the company claims is in complete compliance with
local laws.
AllofMP3 typically charges under $1 for an entire album and just cents per track. By contrast, an album at Apple Computer Inc.'s iTunes Music Store and other licensed services typically costs about $10 and a song 99 cents. Mediaservices has maintained that by paying royalties to a Russian licensing group, the Web site is in compliance with Russian laws. The music industry contends that the Russian licensing group doesn't have the authority to collect and distribute royalties.
Heh, I really do not understand how can US record companies sue russian company in New York? This russian company doesn't have any business operations in US.